Activision Layoff 5 Percent Of Workforce, Various Studios Affected, But Not As Bad As You Think

Game publishing company Activision reportedly laid off 5 percent of its workforce. The cuts were imposed on its corporate office, Infinity Ward, Beenox and other internal studios.

Kotaku learned that the layoffs came immediately after Activision's fourth-quarter financial report. Though admittedly getting better-than-expected and record results, 20 employees of "Call of Duty" developer Infinity Ward were let go.

Follow-up reports said that the entire Q & A department at Beenox was shut down, though maintaining 150 developers, according to Gamasutra. No impact was felt by the layoffs at Blizzard and Major League Gaming.

Though "Call of Duty: Infinite Warfare" was last year's biggest seller, Activision CEO Eric Hirshberg was candidly disappointed with it. Accordingly, the game did not live up to expectations. A move wherein the game publisher said taking "Call of Duty" to space was a big mistake and made them decide that the 2017 slated "Call of Duty" will go back to its terrestrial roots, as currently being developed by Sledgehammer Games.

Reached for comment, Activision said it is realigning its resources to support its coming slate and adapt to the accelerating transition to digital, including opportunities for digital add-on content. Activision has only two games slated for 2017 in "Destiny 2" and "Call of Duty."

Meanwhile, on the business side of things, layoffs are usually a bad sign for most companies. However, Activision is different for it is primarily a video game company. The company's stocks were performing quite well, even posting stellar earnings. The initial confusion of investors about the layoffs sent wrong signals and some decided to sell their shares of stock.

Though a 5 percent or more layoffs are quite unusual and "normally" indicates trouble might be budding for a company, the same cannot be attributed to the video game industry. The difference is that layoffs are common in the industry, as jobs are mostly project-based.

When a project is moving up, more workers are hired to help with the growing amount of work. When the project is done, there is no longer a need for such employees to stay.

The closest simile to this is shooting a movie in the film industry. Once production is done shooting principal photography, there is no longer a need to retain the services of all involved in the production, including the actors. Post-production takes over until the finished movie is done, and then those employed in post-production will have their services terminated as well.